“Value analysis optimization is about integrating all the ingredients we have in our supply chain, working as one to implement major savings.”
Let’s face it, healthcare organizations are even more pressed for revenues and the need to further optimize their existing costs while maintaining and/or improving the quality of their outcomes. Many think that cost management cheapens the products and services that health systems utilize but that should not be the case if done with a value analysis optimization (VAO) methodology.
You might be wondering, “What is value analysis optimization?” Quite simply, VAO is about integrating all the ingredients that we have in our supply chain, such as sourced contracts, value analysis teams, value analysis practitioners, and good data – all working as one to detect, investigate, and implement major savings opportunities that are hidden from your view inside your existing contracts.
You Already Have a Savings and Quality Improvement Engine Built into Your Organization. Why Not Use It?
Value analysis is a methodology and process based on functional analysis that’s goal is to find lower cost alternatives that meet the functional requirements of the customers who use the products or services reliably with equal or better quality. Value analysis is the multi-function Swiss Army knife of the healthcare supply chain that is used for things like solving product problems, recalls, evaluating tough new product requests, as well as looking at the process behind the use of products to find quality related opportunities like infection prevention and risk avoidance. And yes, another feature is that value analysis is a cost management engine designed to investigate products, services, and technologies. We need to harness this and use it!
What You Focus On is the Key to Value Analysis Optimization
The critical problem with value analysis in healthcare is that big savings opportunities are not always easily seen. If you only fill the VA savings engine with larger spend items without knowing whether these opportunities have already been optimized, then you are going to have a lot of dry holes, and your efforts will sputter out altogether. Why go out on a limb for a guess?
We Cannot Guess Where Major Savings Are Hiding Anymore
Do an inventory of your current analytics and find out which can be used to provide solid proof of possible savings opportunities for your VA team to then drill down on and weed out the savings. If you do not have any tools or what we call value analysis analytics, then you need to strongly consider looking for solutions that will start the savings ball rolling and then value analysis can take it from there. I highly recommend using benchmarking and clinical supply utilization reporting to give you the proof you need as to where you can find the next level of big savings.
Value Analysis is Ready to Save and Improve
Value analysis has developed into a new level of maturity in our healthcare organizations, yet we tend to not give them the opportunity to truly shine because they have been pigeonholed into just new product requests, recalls, and contract conversions. VA teams are well suited for much more than that. If you have been in healthcare for the past 20 years, you will remember that they were first and foremost a cost management element for the supply chain and should be highly considered as such again.
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